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Home My WebLink AboutItem 15 Comcast Settlement Agreement{00011931:1} AGENDA ITEM SUMMARY Meeting Date: 5/6/2019 Meeting Type: Regular Meeting Staff Contact/Dept.: Neil Obringer / FIN Kristina Kraaz / CAO Staff Phone No: 541-736-1032 541-744-4061 Estimated Time: 10 Minutes S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Maintain and Improve Infrastructure and Facilities ITEM TITLE: COMCAST SETTLEMENT AGREEMENT ACTION REQUESTED: Authorize the City Manager to execute a substantially similar agreement as Attachment 1. ISSUE STATEMENT: Should the Council provide the City Manager authority to execute an agreement with Comcast, which is substantially similar to Attachment 1, for payment of additional franchise fees owed under the current franchise, reimbursement for costs associated with a fee review, but deferring payment for closure of the Springfield customer service center to later negotiations? ATTACHMENTS: Attachment 1: Proposed Comcast Settlement Agreement DISCUSSION/ FINANCIAL IMPACT: On December 3, 2018, the City Council approved a proposed Comcast settlement agreement for payment of additional franchise fees Comcast owes the City under the current franchise. The proposed settlement also included reimbursement for fee review costs, and a $75,000 one-time payment for closure of the Springfield Customer Service Center in the next franchise agreement. Comcast is now proposing to remove the one-time $75,000 payment from the Settlement Agreement, which would defer the topic of the customer service center to the parties’ franchise renewal negotiations. The City and Comcast have recently taken a short break from franchise renewal negotiations but plan to resume actively meeting to negotiate renewal terms later this Spring. The current franchise agreement expires June 30, 2020. Under the settlement agreement as now proposed by Comcast, Comcast would make the following payments to the City: Agreed upon underpayment: $ 25,525 50% of disputed underpayment: 22,168 Consultant cost to conduct review: 8,421 LCOG cost to facilitate review: 5,290 TOTAL: $ 61,404 Staff is requesting Council approve a substantially similar agreement to Attachment 1, in case minor final adjustments are needed. – 1 – {00009397:6} {00009397:8} City Contract #2225 SETTLEMENT AGREEMENT FRANCHISE FEE REVIEW This Settlement Agreement (the “Settlement Agreement”) is dated this day of 2018, between Comcast of Oregon II, Inc., an Oregon domestic business corporation (“Comcast”), and the City of Springfield, a municipal corporation of the state of Oregon (“City”). Comcast and the City may be individually referred to hereafter as a “Party” or jointly as the “Parties.” RECITALS WHEREAS, Lane County and the Cities of Eugene and Springfield, the local franchising authorities, have each granted a franchise to Comcast for the operation of a cable communication system within Lane County and the cities of Eugene and Springfield (“Franchise”); WHEREAS, Lane County and the Cities of Eugene and Springfield have designated the Metropolitan Policy Commission, acting as the cable commission, as the representative of the local franchising authorities in administration of the Franchise, and whereas Lane Council of Governments (“LCOG”) staff assist with Franchise administration; WHEREAS, the City of Springfield enacted Ordinance 5567 on May 20, 1991, as amended and renewed by Ordinance 6208 on November 20, 2007, granting such franchise; WHEREAS, Section 10(1) of the City’s franchise ordinance permits the City to receive from Comcast a franchise fee in the amount of five percent of Comcast’s gross revenues (the “Franchise Fee”); WHEREAS, the City engaged the firm of Ashpaugh & Sculco, CPA’s, PLC to conduct a review of Comcast’s Franchise Fee payments for the period from October 1, 2009 through September 30, 2014 (“Review Period”); WHEREAS, the City has provided Comcast with a copy of a report prepared by Ashpaugh & Sculco dated February 10, 2017, which report concludes that Comcast owes additional franchise fees for the Review Period; WHEREAS, the Parties deem it to be to their mutual benefit to settle their differences for all Franchise Fee payment issues for the period of October 1, 2009 through September 30, 2014 (the “Settlement Period”), by this Settlement Agreement, resolve all such disputes and specify the terms under which Comcast will pay the City the sum of $61,404 4 in full settlement of all Franchise Fee payment obligations for the Settlement Period, NOW THEREFORE, in consideration of the above recitals, which are expressly made a part of this Agreement, and in consideration of the mutual benefits and undertakings described herein, the Parties agree as follows: Attachment 1, Page 1 of 3 – 2 – {00009397:6} {00009397:8} 1. PAYMENT BY COMCAST Within thirty (30) days of delivery to Comcast of a counterpart original of this Settlement Agreement executed by the City, Comcast shall deliver to the City a check made payable to the City of Springfield in the amount of $61,404. Comcast reserves the right to recover any such sums up to $47,693 in franchise fee payments that have not already been collected. Payments to be sent to: Accounts Receivable - City of Springfield, 225 5th Street, Springfield, OR 97477. The remittance must reference this contract #2225 and approval code #710. 2. RELEASE OF ALL CLAIMS AND FINAL SATISFACTION AND RELEASE OF PAYMENT OBLIGATIONS The Parties hereby release and discharge each other from all claims related to Franchise Fee payments for the Settlement Period and for any claims regarding Comcast’s obligation to maintain a local office in the City arising under Section 12(3)(a) of the franchise ordinance. Payment by Comcast to the City pursuant to Section 1 hereof shall be deemed full and final satisfaction and release of Comcast’s Franchise Fee payment obligations for the Settlement Period. 3. NO WAIVER OR CONCESSION OF THE METHOD OF CALCULATION OF GROSS REVENUES The Parties mutually agree that this Settlement Agreement controls only the Settlement Period and is neither precedent nor waiver by either Party of any claim, methodology or interpretation of the Franchisee’s gross revenues for any future review of periods not within the Settlement Period. 4. GENERAL PROVISIONS (a) Each Party covenants and agrees that it will not make, assert or maintain any claim, demand, action or cause of action that is discharged by this Settlement Agreement against the other Party; provided, however, that either Party may bring an action against the other Party to enforce this Settlement Agreement. (b) Each Party represents that it has not conveyed or assigned any claims released by this Settlement Agreement to any third parties. Each Party represents and warrants that it has the power and authority to enter into this Settlement Agreement. Any breach of this Settlement Agreement shall be subject to all remedies available to the Parties at law or in equity. In addition, any breach of this Settlement Agreement shall be deemed a breach of the Franchise Agreement, and shall be subject to all of the remedies available under the Franchise Agreement. (c) The Settlement Agreement sets forth the entire agreement of the Parties with respect to its subject matter, there being no other promise or inducement to or for the execution of this Settlement Agreement other than the consideration cited above. There are no contingencies, conditions precedent, representations, warranties, or other Attachment 1, Page 2 of 3 – 3 – {00009397:6} {00009397:8} agreement, oral or otherwise, regarding settlement between the Parties not stated herein. (d) The Parties acknowledge that this Settlement Agreement is the product of negotiations between the Parties and does not constitute, and shall not be construed as, an admission of liability on the part of any Party. (e) This Settlement Agreement shall inure to the benefit of, and shall be binding on, the Parties’ respective successors and assigns. (f) This Settlement Agreement may not be modified or amended, nor any of its terms waived, except by an amendment signed by duly authorized representatives of the Parties. (g) This Settlement Agreement shall be construed and enforced in accordance with the laws of the State of Oregon without regard to conflicts of law principles. The Parties agree that the Lane County Circuit Court or U.S. District Court of the District of Oregon (Eugene) is the sole and proper forum for resolving any breach of this agreement or any disputes involving this agreement or relating to its subject matter. (h) This Settlement Agreement shall be effective upon the date when it is executed on behalf of the City. (i) All time frames expressed in terms of days shall mean calendar days, and if the time allowed for action required hereunder shall expire on a Saturday, Sunday, or holiday as defined, and if the time allowed for action required hereunder shall expire on a Saturday, Sunday, or holiday as defined by the laws of the State of Oregon, then the expiration shall automatically be the next calendar day that is not a Saturday, Sunday, or holiday. All time frames are agreed to be of the essence. (j) Severability. If any provision of this Agreement is declared by a court to be illegal or in conflict with any law, the validity of the remaining terms and provisions will not be affected; the rights and obligations of the parties will be construed as if the Agreement did not contain the particular provision held to be invalid. IN WITNESS WHEREOF, the Parties have caused this Settlement Agreement to be executed by duly authorized representatives of each Party on the dates written below. City of Springfield Comcast of Oregon, II Inc. By: By: Name: Name: Title: Title: Date: Date: Attachment 1, Page 3 of 3